Siam General Aviation (SGA) is considering a shuttle between Chiang Mai and Mae Hong Son.
The small private airline says it is ready if Thai Airways abandons the route, which THAI flies twice daily, while SGA has four scheduled flights a week.
The Aviation Department and the Transport Ministry want THAI to drop the route, due to poor performance.
SGA president Jain Charnnarong said it would be Thailand's first air shuttle, a service increasingly popular in Malaysia and Singapore.
He said the company would use 12-seater Cessna 208s on the 35-minute hop, with 10-15 return flights a day for between THB 1,600 and THB 1,800. THAI charges THB 1,500 to THB 2,600.
SGA has three return flights a day from Chiang Mai to Pai and two from Chiang Mai to Chiang Rai, as well as two from Bangkok's Suvarnabhumi Airport to Hua Hin.
"Tourism is booming in the North, especially Pai and Mae Hong Son. We see room to grow this year," said Jain.
SGA will spend THB 210 million on three new aircraft to serve demand, growing despite worries over political turmoil and the economic downturn.
SGA started up eight years ago and has facilities at Don Mueang Airport to maintain local and foreign aircraft.